Las Vegas Sun

October 31, 2014

Currently: 63° — Complete forecast | Log in | Create an account

J. Patrick Coolican:

Sorry, Romney — Nevada won’t see 6 percent unemployment by 2016

Nevada’s future depends on residents taking matters into their own hands

Image

Steve Marcus

Republican presidential candidate Mitt Romney speaks during a campaign rally at the Henderson Pavilion Tuesday, Oct. 23, 2012.

J. Patrick Coolican

J. Patrick Coolican

Mitt Romney should have learned his lesson from President Barack Obama and not made any promises about unemployment.

During a visit to Henderson on Tuesday, Romney said, “How about four years where at the end we get Nevada unemployment down to 6 percent or lower?”

Republicans have been hammering Obama for years because his economists forecast that unemployment would peak nationally at 8 percent even though it eventually reached 10 percent.

The Obama administration badly underestimated the damage from the financial crisis and the housing crash. Historically, a financial crisis like the one we had in 2008 and 2009 leads to a deeper recession and a slower recovery because consumers, who make up 70 percent of our economy, are tapped out and paying down debt.

So now it’s Romney’s turn. Will he help Nevada get to 6 percent unemployment at the end of his first term?

“Nevada isn’t getting to 6 percent in 2016. It’s just not,” said UNLV economist Bill Robinson.

Anyone who has lived through the boom and bust here knows why.

As UNR economist Elliott Parker said, “We weren’t just the victim of a housing bubble, but we were actually a bubble economy.”

During the boom, we had twice as many construction workers as a percentage of our total workforce as the national average.

“We were set up to benefit more from the housing boom than most places, and as result, we were set to fall further,” Robinson said.

His ballpark estimate is that half our unemployment can be attributed to the depression in the construction sector.

Robinson notes that people moved here because there was a perception that there were plenty good-paying jobs. That migration, in turn, created demand for construction. But there was another factor: naked speculation. “There was no real basis for that construction employment,” Robinson said. “They were employed out of a speculative rush. People came to town and needed a house and bought four because they figured they could turn them.”

So, given that there no longer are plentiful jobs to draw people here, and given that the speculative rush is finished, construction demand will never return to what it was.

And without a construction boom, our unemployment rate will remain high, certainly above 6 percent. (Unless, as Parker said, the unemployed pick up and move. But out-migration is never a positive economic development — just ask Cleveland.) The only other way to get to 6 percent unemployment would be another housing bubble, and we’ll pass on that option.

“There’s nothing that’s going to pull those construction jobs back,” Robinson said. “The economy has to shift.”

Indeed it does.

Romney’s plan to reduce taxes and limit regulation would seem to be an attempt to get the economy going by improving the business climate.

As Parker points out, however, if low taxes and light regulation were really the key to rapid economic growth and low unemployment, Nevada would already be there. We have no corporate or individual income tax and relatively light regulation, especially compared with other states such as California.

I don’t blame Romney for not knowing anything about the local economy; local elected officials don’t seem to know much about it either. Really, we should thank Romney because he’s just reminded us once more that Nevada’s future won’t be decided by whomever occupies the White House.

It’s mostly in our hands and our hands alone.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy

Previous Discussion: 26 comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

  1. I can say with absolute certainty to the columnist that if President Obama wins a second term, Nevada won't see unemployment at 6 percent by 2016. Not even close. I can say with certainty that if Governor Romney is elected president, Nevada might see unemployment at 6 percent by 2016. Possibly lower. In fact, look at 12 of the states of the 19 that have republican governors in the state houses. The majority have a lower unemployment rate than the national average. Not Nevada. Not yet. Romney gets elected and it will.

    CarmineD

  2. @CarmineD...

    First of all, Romney isn't going to be elected.
    Secondly,your post makes no sense.How long have we had Republican governors ?

  3. Comment removed by moderator. - -

  4. " I can say with certainty"

    You should read the article. Most people running for office have learned you don't make promises like that, they can't be kept.

    If you could say with certainty you would be one of the richest people in the world by now, bubble or no bubble.

  5. The story here should be, "Obama Wrong About Unemployment Promises." Have you done that story yet, Patrick?

    No, you haven't. You ignore this President's hideous job record and promises, and instead you attack Mitt Romney for what he projects will happen and you declare his predictions as false.

    Damn, I wish this President were as transparent as the LV Sun.

  6. Breaking news! Romney came to Las Vegas and he brought his Federal Income Tax Returns with him to show to the voters! He emphatically showed that.....

    Oh.

    Wait.

    He didn't?

    Oh.

    Sorry.

    I guess he came here to spew lies in Henderson for a few minutes, then he scampered over to the Venetian to shill money from his sugar daddy (Adelson), and to apologize for what he said about Israel during the debate.

    Darn.

    And here I thought he was starting to pay attention to Senator Reid.

  7. Some of the commenters might want to take a minute or two and re-read the article. If the readers who are, primarily, members of the Las Vegas clan of Obama and Reid haters and are having trouble with some of the big words, perhaps they can get a 4th grader to read and explain the article to them.

  8. How can Vegas unemployment go down when 12% of employees are illegals? And now add in 2 million more who want work permits?

  9. Nevada's economy will not, I repeat, will not get to six percent by 2016. The construction field is way over built. I know because I've been looking. I'm retired and my wife soon will be. I've been coming to LV for over forty years, and am looking at relocating here. The homes are dirt cheap, and the weather is easier on my Arthrius.
    Now back to the economy. Gambling is the prime industry here. LV has lots of competition now. I live in SE Mich. I have 12 Casino's within 45 minutes of where I live, as does most of the country. I don't need to come here to gamble. So LV needs to re-invent itself. How, I don't have a clue. Romney though is not the answer. His idea's will put us into a recession in less than two years. This one will make Bush's recession look like childs play. His idea's have all been tried, and failed. Also, he has no backbone, if he can't stand up to POTUS, how is he going to stand up to Congress, China, Etc. The only job creation he will create will be in some other Country. Also, as someone stated, Nevada has been in Republican hands for how many years now? What's that gotten you?

  10. Carmine D...would you care to make a small wager, say $10,000, on hitting 6% or lower?

    This round of high unemployment is not just the cyclical stuff of economic downturn and recovery. Our economy has become subservient to the global economy, witness the very limited impact that stimulus spending had on overall employment. The United States produces more manufactured goods now than it did in 1979 with a far greater [adjusted for inflation] value with 40% fewer workers. Why? Primarily automation and more efficient utilization of human resources. More and more skills and knowledge can be outsourced. Lawyers outsource legal research and production of standardized paperwork to India. Insurance, medical, education, programming and entertainment are all heavily outsourced. In the meantime more than 3 million jobs requiring specialized skills go unfilled because most unemployed lack the skills and knowledge to compete for them. Are you certified to weld oil and gas pipe, aluminum, magnesium or underwater? You can start work tomorrow in North Dakota, Wyoming, Montana, Alberta, Saskatchewan, off the Gulf Coast or right here in dinkyville, Grand Coulee. Can you operate a CNC machine....Ohio, Indiana, Illinois. Can you fabricate, machine and construct airframes? Seattle. There is a major economic shift from brawn to brains and I am afraid, speaking as a teacher and [past] employer, that a significant number of folks in this country, young, middle-aged and old, lack the knowledge, skill and ambition to compete.

  11. Six Percent Unemployment? and He Might as well promise Two Dollar A Gallon Gasoline (Newt), The Release of His Tax Returns, That he will not Privatize Social Security and Medicare, DUMP Medicaid on the states and the Average Household Income will be 250K per year.
    If Anyone TRUSTS HIM I have a Bridge to sell you. The Problem is Local more Than National. Las Vegas has the Least Educated Population of ANY major City in the U.S. in a National Economy increasingly Reliant on an Educated Workforce for well paying jobs. Other than a Low End Manufacturer, Warehouse, Call Center and Service Jobs - what can you do for this Population to provide jobs?
    The FIRST LOCAL Politician to solves this riddle will have a Stature erected for them.

  12. "We have no corporate or individual income tax and relatively light regulation, especially compared with other states such as California."

    Spoken like a true bureaucrat who has probably never owned a business or created a single job in his life. Why are these bureaucrats considered "experts"?

    Try listening to Steve Wynn and Sheldon Adleson, people who actually do create jobs.

  13. "Carmine D...would you care to make a small wager, say $10,000, on hitting 6% or lower?"

    How about $100,000? I like bigger wages.

    CarmineD

  14. "Carmine, your comment makes no sense. We ARE one of your aformentioned 19 states with a Republican Governor so if this is, as you make it seem, a local problem, why has it yet to be fixed?"

    Reread my post.

    CarmineD

  15. Let me see, after reading all of the comments I think I can file them into two categories.

    1. Liberals - What you have is the new normal, isn't our fault, and give us more money and we will fix it.

    2. Conservatives - We can make it better, it's all Obama's fault, and you can keep your money and we will fix it.

  16. ImproveLV said: The economists quoted in the story assume that the population will remain the same, with high levels of construction workers. If something is done about this housing crisis (i.e. - principal reductions), then I think a lot of the unemployed construction workers (and others) will move to where the jobs are. As it is, they're stuck here, in a house that's underwater.

    There is a method of reducing a mortgage for an unemployed construction worker - it is called foreclosure. Since it is thought that all banks are crooks and take homes away from people who pay their mortgage, government said we will protect that homeowner (even though there isn't any proof that banks have been going after those who are current on their mortgage).

    So we have the bank who can't move a deadbeat out because someone is living in a house they are not paying for and can't afford and the homeowner gets a free ride and hopes that he can find a job someday instead of moving on. Why do you think that banks are selling to cash investors and reducing the number of home loans they make?

  17. I don't see any mention of the tourism industry. Our economy will do better when other states do better. We are dependent in that way.

    I don't see construction coming back as it had but those people have already left and gone where there is business. I talked to a construction company owner and he was moving out of town because his business was doing better up north and in North Dakota. I was onsite during the CityCenter build and a lot of those workers weren't planning on staying in Vegas, they were just here for the project.

  18. Spending more, borrowing more, shipping more of our wealth overseas via wars, bases in Europe, economic aide, military aide, prescription / medical aide for all of Africa is going to help the economy recover? Devaluing the dollar, again and again, so our trade deficit increases is going to help? Discouraging savings and investment while encouraging spendthrift spending of individuals (via the tax code) is going to help? Following California's Pied Piper (adopting illegals and paying for everything they could want) is going to help?

  19. If BHO is in office for another four years, we won't see 10% unemployment....
    I was fooled once by Obama, it won't happen again. He not only hasn't done anything in four years he has just made the economy worse...

  20. I do agree that Romney won't take Nevada (or even the general election). The state re-elected Harry Reid, after all and Romney has been painted as an out of touch rich boy (and perhaps rightly so).

    However, I could see 6% unemployment coming to Nevada at some point in the next 4 years. You have stated that many people came to the state in search of easy jobs. Well that trend is continuing in other states. For instance, there are many construction jobs in the south and some neighboring states have relatively low unemployment. Despite its woes, California still attracts many well-paying jobs as well. I don't think there is going to be much job creation in Nevada -- especially given the current state of education in the state. However, I do see many people leaving the state in search of greener pastures, which in effect will bring down the unemployment rate.

  21. The Whitehouse knew within 2 hours!

    www.examiner.com/article/the-white-house...

  22. Nevada's recent unemployment rate is mostly dependent upon the ability of the once-migrant construction workers to again pick up and move to where the work is. That the recession stuck so many of them here has less to do with Nevada (or Obama) (or Romney) (or any political party) than it does with circumstance.

    As for "job creation in Nevada" being "tied to education," as alluded to by Eddie Gaul, where have you been the last 100 years?

    Doesn't anyone pay attention to anything?

  23. I hope Romney DOES win the election. Then we'll see how all of his cheerleaders here will be eating crow when their statements full of praise prove to be a bunch of BS, that in all reality, Romney is not the second coming and not much will change. Oh, they'll be prancing around all "I told you so" at first, but give them a year or two.

    An unemployment rate of 6% in Nevada. Yeah, right.

  24. "An unemployment rate of 6% in Nevada. Yeah, right."

    Yes, right. Here's how: Day one of the Romney presidency, he signs an Executive Order to the HEADS of ALL FEDERAL AGENCIES declaring that henceforth ALL FEDERAL GOVERNMENT CONFERENCES AND OFF-SITE MEETINGS be held, whenver possible, in Las Vegas, Nevada. That will easily get the 11.8 percent unemployment rate in Nevada to 6 percent in 4 years.

    Think it can't and won't happen. Think again.

    CarmineD

  25. What the posters here fail to look at, are their locally elected representatives; like our U.S. Congress, and U.S. Senate. How many jobs bills has Obama tried to get passed to help the working class that congress has filibustered?

    You all need to look away from our POTUS, and start looking at our congress; they are ALL millionaires. You think they are somehow all responsible for this mess we're in as well? I do. They all rolled over for #43 and compromised their better judgement for what HE wanted (an illegal war), but, are hell bent on setting #44 up for failure at every turn. A commander-in-chief is only as good as the congress in office.

    Stop blaming Obama. Look around, watch the news and look up American political history; you will see the pattern of congressional hypocrisy over the last 100 years.

  26. <<Yes, right. Here's how: Day one of the Romney presidency, he signs an Executive Order to the HEADS of ALL FEDERAL AGENCIES declaring that henceforth ALL FEDERAL GOVERNMENT CONFERENCES AND OFF-SITE MEETINGS be held, whenver possible, in Las Vegas, Nevada. That will easily get the 11.8 percent unemployment rate in Nevada to 6 percent in 4 years.

    Think it can't and won't happen. Think again.>>

    Carmine
    Whatever you're smoking or drinking, pass it around.